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Starbucks (SBUX) closed the most recent trading day at $71.87, moving +1.3% from the previous trading session. The stock outpaced the S&P 500's daily gain of 0.22%. Meanwhile, the Dow lost 0.13%, and the Nasdaq, a tech-heavy index, added 0.2%.
Prior to today's trading, shares of the coffee chain had lost 1.36% over the past month. This has was narrower than the Retail-Wholesale sector's loss of 6.7% and the S&P 500's loss of 8.32% in that time.
Investors will be hoping for strength from Starbucks as it approaches its next earnings release. On that day, Starbucks is projected to report earnings of $0.78 per share, which would represent a year-over-year decline of 22.77%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $8.21 billion, up 9.5% from the year-ago period.
SBUX's full-year Zacks Consensus Estimates are calling for earnings of $2.89 per share and revenue of $32.38 billion. These results would represent year-over-year changes of -10.8% and +11.42%, respectively.
Investors might also notice recent changes to analyst estimates for Starbucks. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.
Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 0.97% lower within the past month. Starbucks is holding a Zacks Rank of #5 (Strong Sell) right now.
In terms of valuation, Starbucks is currently trading at a Forward P/E ratio of 24.51. Its industry sports an average Forward P/E of 16.88, so we one might conclude that Starbucks is trading at a premium comparatively.
Also, we should mention that SBUX has a PEG ratio of 2.09. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Retail - Restaurants was holding an average PEG ratio of 1.66 at yesterday's closing price.
The Retail - Restaurants industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 198, which puts it in the bottom 22% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.
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